AI – Predicting the Future of Business

Depending on who you listened to at Davos, artificial intelligence (AI) either has the potential to be more transformative for humanity than fire, or trigger the end of civilization. (Google’s CEO Sundar Pichai and Alibaba’s founder Jack Ma, respectively). Amid the hype and hyperbole however, there was consensus: AI is going to revolutionize not just business, but economies in coming years; CEOs and nations states need to be prepared.

If there was one topic on everyone’s lips at the annual World Economic Forum in the Alpine town, it was this – with many warning that AI will drive epoch-shaping changes.

Most business leaders agreed that few sectors will remain untouched, from services to manufacturing. As Siemens’ CEO Joe Kaesar put it, AI is already helping to integrate the virtual and physical worlds in “cyber-physical” systems that allow for the creation, then testing of “digital twins”, of real world processes and equipment.

If businesses are to flourish in an environment so fundamentally disrupted by the emergence of powerful AI, continuous learning needs to be part of their DNA, as the CEO of Genpact, N.V. Tyagarajan highlighted, emphasising that from individuals to institutions, everyone needs to play a role in “preparing the global workforce to thrive alongside intelligent machines…”

Too much data still goes to waste

Yet for all these broad-brush pictures of the near-future, there remains huge value yet to be captured from AI, with many businesses still failing to recognize the opportunity presented by predictive technologies, powered by large, searchable data sets, several attendees noted.

It was a point best articulated at Davos by the CEO of IBM Corporation, Ginni Rometty, who drove home that that innovations in AI are only as effective as the data they have access too.

“For businesses, data is the key to competitive advantage. [Yet] only 20% of the world’s data is searchable – 80% of the data out there is sitting on private servers, most of them in businesses. The potential value this data holds is immeasurable. When unleashed by new technology like AI, it is helping businesses develop deeper insights, make exponentially better decisions and engage customers as never before.”

Value-added in value chains

The Consumer Goods Forum (CGF) has been following developments in the sector closely for many years – developments which have informed the proposition of the End-to-End Value Chain Pillar. The pillar supports efforts by CGF members to use information flows across value chains, with the aim of improving efficiency as well as transparency and was launched on the back of the insight that companies need to find new ways to collaborate on pre-competitive areas throughout the supply chain, using data.

Poor data handling, packaging waste and outmoded technologies can lead to spiralling costs and inefficiencies that span entire supply chains, ultimately impacting not just business performance but consumer trust.

This becomes ever more important, as predictive AI is used at the e-commerce “shop front” to personalise navigation, offers and engagement.

Value chains are having to evolve fast as a result – those built for shipping bulk at predictable intervals with the lowest back-end cost are increasingly no longer fit for purpose. Consumer-driven demand networks are leading the way – and as Davos showed, getting it right requires deep thinking and industry collaboration; something the CGF is leading the way on.

We will soon be publishing two new documents on AI: Artificial Intelligence & Robotics (PA Consulting) and Artificial Intelligence & Data Analysis (IBM), as part of the End-to-End Learning Series to help our members prepare for the AI and big data revolution. We anticipate many more rapid changes in this sector before Davos rolls around again, so we urge our members to participate.